<p>When trying to do some financial aid calculators, I am trying to figure out where to put the figure of our d’s trust from her Grandmother. She is the only kiddo that has this trust for some very complex and weird reasons, non relevant to this discussion except we didn’t need to account for it with our s’s. It was a trust that is controlled by my father and an attorney that is written very specifically to not pay out to her until her 25th-30th birthdays (its intention was to buy a house or at least be a significant down payment…close to 6 figures) and the only exception is that interest is paid starting at 18 and a payout can be petitioned for education, but it is up to the trustee whether to pay or not. (and I get the feeling that my dad better think it is the only way for her attend would be this money) So with that said, it is great that some of these calculators ask for student assets, which it is an asset, but really not touchable. I want to be honest, but if a school thinks she can dip into it, it really is not the case. Not sure how it will be listed on the FA documents, but on these calculators that ask for student assets, do I list it, since it really is not hers until 25? Do I list the interest only?</p>
<p>List it with details –</p>
<p>
No, you have to list the value as an asset. Even though she cannot access it, it is still considered a student asset as far as FA is concerned. Restrictions on a trust do not protect the trust from the FA calculation (except in rare and usually court ordered situations). Any income she receives from the trust will be income. The value of the trust is an asset.</p>
<p>finaid has some more detailed information
[FinAid</a> | Saving for College | Trust Funds and Financial Aid](<a href=“http://www.finaid.org/savings/trustfunds.phtml]FinAid”>http://www.finaid.org/savings/trustfunds.phtml)</p>
<p>I’m sorry to tell you this but it is an asset that must be listed along with any other assets that she has. I understand that she can’t touch it but I don’t think that changes anything. I’m not an accountant so feel free to correct me if I am wrong anyone.</p>
<p>1) Determine the value of the trust. </p>
<p>2) Give it all to them. ;)</p>
<p>Is the trust revocable by the Grantor? If not, the terms of the trust will likely be viewed as a sham to avoid a higher EFC. If so, and Grandpa is still breathing fresh air, I’d see a lawyer. Pronto. Kids assets are “taxed” at the highest rate of any asset by FAFSA and Profile. IIRC, it used to be 35% per year.</p>
<p>For FAFSA 20% of student assets go to the EFC. It changed from 35% 3-4- years ago. No idea for profile.</p>
<p>Sorry. I’m soooooo old. But at least I did say “used to be”. 
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<p>(I feel a little like our old toothless ranch poodle.)</p>
<p>For FAFSA purposes, it is my understanding that it doesn’t matter if the trust is irrevocable or revocable…your child’s share of the value of the trust MUST be reported on the FAFSA. We researched this rather extensively a few years ago and found that even if the beneficiary of a trust could not access that trust immediately, it was still considered an asset…period.</p>
<p>(Not knowing the timeframe we are talking about and never having seen the trust…)</p>
<p>But thumper, my point was that if it was revocable, (assuming facts we don’t have) living grandpa grantor might could revoke it and get the $ out of the trust (or eliminate the student as a beneficiary). (Hence, the “go to a lawyer” advice.)</p>
<p>They can’t count something that doesn’t exist.</p>
<p>I’d prefer to NEVER take sides against Thumper … but in this one case I have to make an exception. How the Trust is structured makes all the difference. You really want to do this one “by the book” due to the negative consequences of an incorrect interpretation. Ignore the Trust and you may be committing fraud … declare the trust but incorrectly designate the Trust as belonging to the student (when someone else is the true owner) and the EFC contribution of the asset will be 20% instead of 6%. My advice is to consult a lawyer. Cheap insurance.</p>
<p>(sorry Thumper.)</p>
<p>The trust is irrevocable. I guess my question stems from the fact that the “trust” owns the money. She is a benefactor. She does pay taxes on the interest the way it is structured. She files her own tax return. (The Trust attorney acutally does all the filing and the trust pays the taxes via distribution) but you get the point. I will consult the the Trust attorney, but that really screws things up. Especially if we are forced to ask for a distribution because it tips the scales to unaffordable. And even more so if the request is denied.</p>
<p>These are the rules for student assets and about reporting trusts, direct from FAFSA</p>
<p><a href=“http://studentaid.ed.gov/students/attachments/siteresources/CompletingtheFAFSA10-11.pdf[/url]”>http://studentaid.ed.gov/students/attachments/siteresources/CompletingtheFAFSA10-11.pdf</a></p>
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<p>When trying to simplify trust questions it comes down to this:
Whose SS# does it report to?
If it is your DDs, then it is her asset.</p>
<p>If the trust has it’s own TID#, then it still has to be “attached” to a real person for financial aid, so you have to pick a person to whom it belongs, but that choice better be defensible.</p>
<p>^ If it’s a trust it should have its own EIN. Interest payments will be assigned to the SSN of the recipient of those interest payments. As several prior posters have said, it’s not unusual that interest payments be imputed, even if those interest payments are not distributed. From the OPs comments it seems that some distribution is taking place.</p>
<p>Estimating present value can be problematic. This may or may not be true in the OPs case. What value does one place on property that cannot be liquidated, or which has a major undetermined liability associated with it? Not to nit pick the issue, but if the major asset within the trust is a business and that business is in bankruptsy, what value would one assign?</p>
<p>As someone ^ points out, whatever course you take had better be defensible. Who better to help with that than an attorney?</p>
<p>Didn’t you say that a [ayout can be petitioned for education? So this trust is, actually, available to help pay for college, right?</p>
<p>Our son had some stocks and bonds (savings bonds and one gov. bond) from grandparents, which did not add up to a whole lot of money but which certainly elevated our EFC his first year. Otherwise, our income is quite low.</p>
<p>We cleaned out those assets paying for the first year, with some financial aid (about half the cost), and then our EFC was appropriate to our income.</p>
<p>If you have assets like these, often you have to spend them down in order to get the financial aid you would otherwise get, based on income. At least, that is our experience.</p>
<p>It was painful because we had hoped our son would have these assets to help him out later in life, but we also felt it was fair. Some people don’t have any unearned, or sometimes even earned, assets at all.</p>
<p>NewHope, I’m not an expert on trusts and have not filed for FAFSA. I think you are generally correct, but I know of one case in which the trust does not get its own SS#. My mother set up what is known as a beneficiary defective trust for me, my wife and our progreny. The “beneficiary defective” part means that the trust is attached to my SS# and does not, I believe, have its own. It is me for tax purposes but not control purposes. It means that I can sell an asset to the trust with no taxable consequence. But, I recall that a pro rata portion of it would probably have had to be declared for FAFSA purposes as belonging to each kid.</p>